Online banking bill payments is the modern way of paying your monthly dues, usually covering vital utilities like water and electricity. These are the initial areas that the online banking bill payment scheme previously covered. In recent years, though, other areas like insurance premiums, credit card dues, mortgage loans, and many others have been incorporated into the system. This has made it quite easy for a lot of people to make payments on their bills since they need not go out of the house carrying a significant amount of cash that can attract the attention of pickpockets.

Online banking bill payments is one service that most banks these days are known to offer. This is usually free of charge although there are cases when banks place a fee on their online bill payments services but this is generally only a small amount.

Obviously, paying bills online banking is meant to replace the traditional mode of payment where you write out a check to the concerned company. This generally ancient payment method can take too much of your precious time apart from the added cost of having to maintain paper checks. With online payment, you get to accomplish the task a lot faster. You also tend to make less and less use of paper which can go a long way in preserving the environment.

Two Ways to Pay Online

If you regularly make bills payments online banking, you will find that it comes in two different types. The first involves the bank where you have an existing account. In simple terms, if you make use of the bank-based online banking bill payments system, the concerned bank will transfer money stored in your account to the account of the company where you intend to make a payment. This will naturally require the concerned company to be electronically hooked up to your bank, or at most, to the network where your bank falls under so the money transfer can be effected. In case the said company is not hooked up, you could still make online banking payment for your bills since online bill payments are also capable of printing checks that can then be mailed electronically in your behalf.

The second online banking bill payments service option involves a service provider, particularly one where you have an existing contract. A good example of this is the telephone company where you are given the option to pay your phone bills through its official website. In this particular form of online bill payments, you will initially have to provide your telephone company with a voided cheque before you can proceed with your online banking payment.

Setting Up the System

Setting up a personal online banking bill payment system is quite easy. In the case of banks, you just need to visit its online banking payment option where you can create an account in behalf of the company that you intend to make as the recipient of your payment. Simply enter the company name and its address, then add in your own account number.

If your bill payment for that company is done monthly, you just need to open the company account that you created from your bank website every month. From there, simply enter the required amount as payment for your monthly bill and your bank will take it from there. It will either withdraw the amount from your existing bank account or produce the needed cheque and mail this to your intended recipient, whichever is applicable.

In the case of service providers, paying their corresponding bills through the online method will require you to provide them with several important documents, including at least one voided cheque, deposit forms, and one authorization letter. Once the concerned service provider receives these documents, you can then set up your personal online bill payment system by visiting the company website. On its online banking payment option, you should enter vital information like your name, address, account number, bank branch, and the like. From there, you can follow the process involved when paying online through your bank.

Automatic Online Payment

Online bill payment may appear a little more modern since payments are made a lot quicker and generally hassle-free. However, it still involves some form of manual manipulation since you still need to visit the company website at least once a month to key in the amount that will serve as your monthly payment.

Nevertheless, you should find the more updated version of online bill payments service generally more convenient. It now comes in a fully automated fashion whereby money is automatically pulled out from your existing bank account during certain periods to serve as payment for services that need to be paid on a regular basis. With the automated online bill payments scheme, you no longer need to click on the mouse every month just to pay common household bills, including your insurance premium. The system itself will do the clicking for you.